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REITspots: IREIT Global’s Properties (Overseas Site Visit)

Post author:Marubozu
Post published:June 10, 2024

On the second edition of REITspots, we travel to Barcelona, Spain to visit 2 properties belonging to IREIT Global (SGX: UD1U). This time round, gain an exclusive look inside the 2 properties, Saint Cugat Green and Parc Cugat.

Put on your walking shoes and grab your investment hat, because REITsavvy is taking you on a stroll through the exciting world of REIT properties with our brand-new series: REITspots! Whilst at one of the properties, I got to briefly talk to Charles de Molliens, Vice President Real Estate Private Equity at Tikehau Capital. Throughout this article, you’ll get to know more about the properties and IREIT Global itself.

IREIT Global

R | S | P | I

Overview

IREIT Global owns 2 properties, namely Saint Cugat Green (€44.6 mil valuation) and Parc Cugat (€27.0 mil valuation). This visit was done on a Monday afternoon, therefore there’ll be a good indication of occupancy and ‘liveliness’ of the area. The properties are about 1.5 hours from the Barcelona Airport and about a 30 min drive from the city centre.

Saint Cugat Green (left) and Parc Cugat (right)

Taking public transportation, Parc Cugat is a mere 5 mins’ walk from St Joan Station, which is also a 30 min train ride from the city centre. For Sant Cugat Green, it is a 5 mins’ bus ride (or a 30 mins’ walk) from St Joan Station.

St Joan Station. The business park, where Parc Cugat is in, is visible from the station.

Saint Cugat Green

“Sant Cugat Green is a modern office building in Barcelona with a 5,256 sqm data centre space and a restaurant for internal use by its tenants. The property comprises three basement levels, a ground floor and four upper floors, and 580 parking spaces (of which 30 are for motorbikes). The property has floor plates with more than 3,000 sqm situated around a central atrium and enjoys good natural light throughout the building. Sant Cugat Green is LEED Gold certified.” – IREIT Global’s website.

On first glance, this property looks very modern both from the outside and inside. I was only allowed to access the lobby area inside the gated area, as this is a mainly data centre focused building. Data centres are stricter in general due to confidentiality. You may ask, doesn’t IREIT Global specialise in Office properties?

Q: You have acquired Sant Cugat Green not too long ago. Are you looking to diversify and move towards Data Centres?

Charles: Not really. It is only because Sant Cugat Green was formerly a Data Centre operated by Deutsche Bank. After they moved out, we bought the property and have leased it to various companies such as HP. As the building was built back in 1993, we have renovated the building in 2022 and now it is currently tenanted to Oxigent Technologies. Their lease is due to end in 2034.

Parc Cugat

“Parc Cugat is a modern office building situated within a business park in the office market of Sant Cugat del Vallès (Barcelona), which offers various services such as restaurants and hotels, as well as an efficient transport connection to the city of Barcelona. The property is located just 3km from Sant Cugat Green. The building consists of 12,000 sqm of office space, an auditorium with capacity for 200 people and more than 400 parking spaces for cars and motorcycles. With a modern façade and a versatile space distribution, the property comprises four basement levels, a ground floor and four upper floors with more than 2,000 sqm. Parc Cugat is LEED Silver certified.” – IREIT Global’s website.

For Parc Cugat, I was able to gain access and tour the property in depth. This was a very insightful visit of one of IREIT Global’s properties. Enjoy the slideshow.

Parc Cugat is located within a Business Park, Sant Cugat del Vallès

This property is still undergoing minor works, such as the ongoing enhancement of the common terraces. For example, new automatic water pipes are being installed, and flowers and trees have also been ordered.

Common Areas

Office Spaces

Occupancy of Parc Cugat is reported to be only 61.1%. Judging by the untenanted office spaces, it is easy to see why. However, one of these office spaces have already a Letter of Intent to be let, although it is still not confirmed.

IREIT Global’s ESG efforts

One notable observation of Parc Cugat that is clearly visible is their intent to meet ESG targets (at least for the environmental aspects). A trip to the rooftop reveals arrays of solar panels, to provide clean solar energy for the office building.

Rooftop

Bonus: IREIT’s leasing strategy

Charles: Most of IREIT’s tenants (and in Europe) have a mandatory minimum leasing period (i.e. tenants must pay a penalty is they leave early). For example, in Germany, it may be 10 years, while in Spain it can be 4-5 years.

Conclusions

This site visit to IREIT Global’s properties has been eye opening. I got to see first-hand ongoing Asset Enhancement Initiatives (AEIs) of office buildings as well as the initiatives that REITs are taking as part of their ESG Commitment. Lastly, I would like to thank Charles de Molliens, Vice President Real Estate Private Equity at Tikehau Capital for his time.

Kenny Loh is a Wealth Advisory Director and REITs Specialist of Singapore’s top Independent Financial Advisor. He helps clients construct diversified portfolios consisting of different asset classes from REITs, Equities, Bonds, ETFs, Unit Trusts, Private Equity, Alternative Investments, Digital Assets and Fixed Maturity Funds to achieve an optimal risk adjusted return. Kenny is also a CERTIFIED FINANCIAL PLANNER, SGX Academy REIT Trainer, Certified IBF Trainer of Associate REIT Investment Advisor (ARIA) and also invited speaker of REITs Symposium and Invest Fair. You can join my Telegram channel #REITirement – SREIT Singapore REIT Market Update and Retirement related news. https://t.me/REITirement

Overseas Site Visit: Elite Commercial REIT’s Properties

Post author:Marubozu
Post published:January 6, 2024

For the year-end holidays, this year, I took the opportunity to travel to the United Kingdom. Guess what S-REIT has properties in the UK? Elite Commercial REIT (SGX: MXNU)! I visited 2 of their properties on-site: Broadway House, Ealing, London and Glasgow Benefits Centre, Glasgow. This is the link to Elite Commercial REIT’s properties.

Do note that I only visited 2 properties. The conclusions drawn in this post cannot accurately represent all 150+ of their other properties.

Elite Commercial REIT’s financial ratios

Glasgow Benefits Centre, Glasgow

Glasgow Benefits Centre: Northgate Building

The first property I visited was the Glasgow Benefits Centre. It is a large, 3-storey building spanning about 200m x 70m. It is located very near the city centre, within 1km distance. It is also about 600m away from one of the Glasgow Subway stations.

There are no signs on the building that this is a property of Elite Commercial REIT. Although this is also the case for the other property as well. However, there are signs suggesting that this property is a HM Passport Office, with Google Street View suggesting long queues for passport related-services. This goes in line with Elite’s majority tenant being the HM Government.

Surrounding of Glasgow Benefits Centre. It is within 600m of the city.

Broadway House, Ealing, London

The next property seems to be a Job Centre. This property is located in Ealing, about 12km from the city centre. It is in the central of Ealing, which seems to be a small town within London. There are many shops in the vicinity.

Google Street View of Lot 10 Shopping Mall’s Facade

A bus stop is located right outside of the building. It seems to me that almost all shops in the vicinity are tenanted, with good footfall in the area. There are many shops, supermarkets and eateries in the area. It looks to be a good location for a hotel.

Surroundings of Broadway House, Ealing

Its location is also a slight distance from the nearest London Underground Station. It is about 1.2km away from Ealing Broadway (with 3 lines), and about 600m away from West Ealing (served by the Elizabeth line). From here, it takes about 30 minutes by train to the centre of London.

Kenny Loh is a Wealth Advisory Director and REITs Specialist of Singapore’s top Independent Financial Advisor. He helps clients construct diversified portfolios consisting of different asset classes from REITs, Equities, Bonds, ETFs, Unit Trusts, Private Equity, Alternative Investments, Digital Assets and Fixed Maturity Funds to achieve an optimal risk adjusted return. Kenny is also a CERTIFIED FINANCIAL PLANNER, SGX Academy REIT Trainer, Certified IBF Trainer of Associate REIT Investment Advisor (ARIA) and also invited speaker of REITs Symposium and Invest Fair. You can join my Telegram channel #REITirement – SREIT Singapore REIT Market Update and Retirement related news. https://t.me/REITirement

Overseas Site Visit: Starhill Global REIT’s Kuala Lumpur Properties

Post author:Marubozu
Post published:January 15, 2022

With VTLs and travel slowly returning to normal, I took the opportunity this year-end season to visit Kuala Lumpur, and in the process, take a look at how S-REITs properties are performing. Starhill Global REIT has 2 properties in Kuala Lumpur, both located in Bukit Bintang, the shopping and entertainment district of Kuala Lumpur. The goal is to see in-person how the actual properties of REITs are doing in their overseas markets, and this site visit yielded some puzzling results.

Bukit Bintang, Kuala Lumpur, Malaysia

View of Kuala Lumpur from Lot 10’s rooftop garden.

This visit was done during the year-end festive season, at around 4-6pm. Footfall in Bukit Bintang is very high, with crowds to be seen everywhere. Major tenants occupying the street include both Starhill Global REIT’s properties Lot 10 Shopping Mall and The Starhill (formerly Starhill Gallery), Farenheit88, and Pavillion Bukit Bintang.

Bukit Bintang is also served by 2 rail lines, the KL Monorail and the MRT Kajang Line, in addition to the public buses that can be seen commonly on this street.

Lot 10 Shopping Mall

The front of Lot 10 Shopping Mall had high footfall, which is to be expected. Unfortunately for Lot 10, I did not take many pictures so here is a Google Street View image.

Compared to Pavilion Bukit Bintang, Lot 10 Shopping Mall is nowhere as crowded. However, there are still some shoppers visiting its shops, and the Lot 10 Hutong Food Village is relatively populated with diners. Shoplots seem fully occupied with no visible empty ones, even though footfall on the top level is a little sparse.

A visit to the rooftop garden yielded some nice views. There seems to be a gym and a cafe on the top floor.

A tenant occupying the rooftop floor, seems like a gym

All in all, Lot 10 Shopping Mall is definitely doing relatively well in its good location, attracting enough tenants to its food village and its anchor tenants (like H&M) on the lower floors.

The Starhill

Similar to Lot 10, its location right in Bukit Bintang is also excellent, albeit even slightly better, located right opposite Pavilion Bukit Bintang.

Entering the Starhill, we are greeted with a few tenants, however the mall was mostly empty, with shoplots boarded up. This was to be expected as The Starhill is currently undergoing an Asset Enhancement Initiative (AEI).

This was slightly puzzling, as we did not expect The Starhill to be near-empty. There are several shops with patrons on the ground floor, but the 1st and 2nd floor it was pretty much empty. (In Singapore, 1st floor is the same as Ground floor in Malaysia)

A visit to The Starhill’s directory yielded fewer than 30 tenants, which is to be expected. It remains to be seen how The Starhill will perform Post-AEI, but it is located in an excellent location with very high footfall.